Ramaco Resources, Inc. 10-K

Item 8. Financial Statements and Supplementary Data INDEX TO CONSOLIDATED FINANCIAL STATEMENTS ​ ​ Report of Independent Registered Public Accounting Firm ( PCAOB ID 2276 ) 78 Consolidated Balance Sheets 80 Consolidated Statements of Operations 81 Consolidated Statements of Equity 82 Consolidated Statements of Cash Flows 83 Notes to Consolidated Financial Statements 84 ​ ​ ​ 75 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ​ To the Shareholders and Board of Directors Ramaco Resources, Inc. ​ Opinion on the Financial Statements and Internal Control over Financial Reporting ​ We have audited the accompanying consolidated balance sheet of Ramaco Resources, Inc. and subsidiaries (the "Company") as of December 31, 2022, and the related consolidated statements of operations, equity, and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in 2013 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). ​ In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in 2013 Internal Control-Integrated Framework issued by COSO. ​ Basis for Opinion ​ The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on the Company's financial statements and an opinion on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. ​ Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that responds to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. ​ Definition and Limitations of Internal Control over Financial Reporting ​ An entity's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. An entity's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the entity; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the entity are being 76 Table of Contents made only in accordance with authorizations of management and directors of the entity; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the entity's assets that could have a material effect on the financial statements. ​ Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. ​ Critical Audit Matters ​ The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. ​ Asset Retirement Obligations ​ At December 31, 2022, the Company's asset retirement obligation ("ARO") liabilities totaled $28.9 million. As discussed in Note 2 and Note 5 to the financial statements, the Company estimates its ARO liabilities for final reclamation based upon detailed engineering calculations of the amount and timing of the future cash spending for a third party to perform the required work. The Company records an ARO asset associated with the discounted liability for final reclamation. The obligation and corresponding asset are recognized in the period in which the liability is incurred. As changes in estimates occur, the revisions to the obligation and asset are recognized at the appropriate credit-adjusted, risk-free rate. ​ We identified the valuation of the asset retirement obligation as a critical audit matter because the estimate involves a high degree of subjectivity and auditing the significant assumptions utilized by management in estimating the amount of the liability requires judgment. In particular, the obligation is determined using a discounted cash flow technique and is based upon mining permit requirements and various assumptions including discount rates, inflation rate, estimates of disturbed acreage, timing of reclamation activities, and third-party reclamation costs. ​ To audit the ARO liabilities, our procedures included, among others: ​ ● We obtained an understanding of the relevant controls related to the Company's accounting for the ARO liability, including the controls over management's review of the significant assumptions and other inputs. ● We evaluated the methodology used, and tested the significant assumptions discussed above and the underlying data used by the Company in its estimate. ● We compared assumptions including the credit-adjusted risk-free rate and inflation rate to current market data. In addition, to assess the estimates of disturbed acreage, timing of reclamation activities, and reclamation costs, we evaluated significant changes from the prior estimate. ● We utilized an external specialist to assist in our assessment of the Company's ARO liability. As part of this effort, the specialist performed a selected observation of mine site operations, interviewed members of the Company's engineering staff, assessed the completeness of the mine reclamation estimate with respect to meeting mine closure and post closure plan regulatory requirements, and evaluated the reasonableness of the engineering estimates and assumptions. ​ ​ /s/ MCM CPAs & Advisors LLP ​ We have served as the Company's auditor since 2022. Louisville, Kentucky March 14, 2023 77 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ​ Stockholders and the Board of Directors of Ramaco Resources, Inc. Lexington, Kentucky ​ Opinion on the Financial Statements ​ We have audited the accompanying consolidated balance sheet of Ramaco Resources, Inc. (the "Company") as of December 31, 2021, the related consolidated statements of operations, equity, and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. ​ Basis for Opinion ​ These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. ​ Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. ​ ​ /s/ Crowe LLP ​ We served as the Company’s auditor from January 2022 through April 2022. ​ Houston, Texas March 31, 2022 ​ ​ ​ 78 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ​ To the Board of Directors and Stockholders of Ramaco Resources, Inc. Lexington, Kentucky ​ Opinion on the Financial Statements ​ We have audited the accompanying consolidated statements of operations, equity, and cash flows of Ramaco Resources, Inc. (the Company) for the year ended December 31, 2020 and the related notes (collectively referred to as the financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated results of its operations and its cash flows for the year ended December 31, 2020 in conformity with accounting principles generally accepted in the United States of America. ​ Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. ​ Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. ​ /s/ Briggs & Veselka Co. ​ We served as the Company’s auditor from 2015 to 2021. ​ Houston, Texas February 18, 2021 79 Table of Contents ​ Ramaco Resources, Inc. Consolidated Balance Sheets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, In thousands, except share and per share information 2022 2021 ​ ​ ​ ​ ​ ​ ​ ​ Assets ​ ​ ​ ​ Current assets ​ ​ ​ ​ Cash and cash equivalents ​ ​ $ 35,613 ​ $ 21,891 Accounts receivable ​ ​ 41,174 ​ 44,453 Inventories ​ ​ 44,973 ​ 15,791 Prepaid expenses and other ​ ​ 25,729 ​ 4,626 Total current assets ​ ​ 147,489 ​ 86,761 Property, plant and equipment, net ​ ​ 429,842 ​ 227,077 Financing lease right-of-use assets, net ​ ​ ​ 12,905 ​ ​ 9,128 Advanced coal royalties ​ ​ 3,271 ​ 5,576 Other ​ ​ 2,832 ​ 491 Total Assets ​ ​ $ 596,339 ​ $ 329,033 Liabilities and Stockholders' Equity ​ ​ ​ ​ ​ ​ ​ Liabilities ​ ​ ​ ​ ​ ​ ​ Current liabilities ​ ​ ​ ​ ​ ​ ​ Accounts payable ​ ​ $ 34,825 ​ $ 15,346 Accrued expenses ​ ​ 41,806 ​ 19,410 Asset retirement obligations ​ ​ 29 ​ 489 Current portion of long-term debt ​ ​ 35,639 ​ 7,674 Current portion of related party debt ​ ​ ​ 40,000 ​ ​ — Current portion of financing lease obligations ​ ​ ​ 5,969 ​ ​ 3,461 Insurance financing liability ​ ​ ​ 4,577 ​ ​ 280 Total current liabilities ​ ​ 162,845 ​ 46,660 Asset retirement obligations ​ ​ 28,856 ​ 22,060 Long-term debt, net ​ ​ 18,757 ​ 3,339 Long-term financing lease obligations, net ​ ​ ​ 4,917 ​ ​ 4,599 Senior notes, net ​ ​ ​ 32,830 ​ ​ 32,363 Deferred tax liability, net ​ ​ 35,637 ​ 6,406 Other long-term liabilities ​ ​ ​ 3,299 ​ ​ 2,532 Total liabilities ​ ​ ​ 287,141 ​ 117,959 Commitments and contingencies ​ ​ — ​ — Stockholders' Equity ​ ​ ​ ​ ​ ​ ​ Preferred stock, $ 0.01 par value, 50,000,000 shares authorized, none issued and outstanding ​ ​ — ​ — Common stock, $ 0.01 par value, 260,000,000 shares authorized, 44,155,735 at December 31, 2022 and 44,092,981 at December 31, 2021 shares issued and outstanding ​ ​ 442 ​ 441 Additional paid-in capital ​ ​ 168,711 ​ 163,566 Retained earnings ​ ​ 140,045 ​ 47,067 Total stockholders' equity ​ ​ 309,198 ​ 211,074 Total Liabilities and Stockholders' Equity ​ ​ $ 596,339 ​ $ 329,033 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 80 Table of Contents Ramaco Resources, Inc. Consolidated Statements of Operations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, In thousands, except per-share amounts 2022 2021 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenue $ 565,688 $ 283,394 $ 168,915 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Costs and expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of sales (exclusive of items shown separately below) ​ 332,960 ​ 195,412 ​ 145,503 Asset retirement obligations accretion ​ 1,115 ​ 615 ​ 570 Depreciation, depletion, and amortization ​ 41,194 ​ 26,205 ​ 20,912 Selling, general and administrative ​ 40,032 ​ 21,629 ​ 21,023 Total costs and expenses ​ 415,301 ​ 243,861 ​ 188,008 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) ​ 150,387 ​ 39,533 ​ ( 19,093 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense), net ​ 2,637 ​ 7,429 ​ 11,926 Interest expense, net ​ ( 6,829 ) ​ ( 2,556 ) ​ ( 1,224 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (loss) before tax ​ 146,195 ​ 44,406 ​ ( 8,391 ) Income tax expense (benefit) ​ 30,153 ​ 4,647 ​ ( 3,484 ) Net income (loss) ​ $ 116,042 ​ $ 39,759 ​ $ ( 4,907 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings (loss) per common share ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 2.63 ​ $ 0.90 ​ $ ( 0.12 ) Diluted ​ $ 2.60 ​ $ 0.90 ​ $ ( 0.12 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic weighted average shares outstanding ​ 44,164 ​ 43,964 ​ ​ 42,460 Diluted weighted average shares outstanding ​ 44,702 ​ 44,257 ​ ​ 42,460 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 81 Table of Contents Ramaco Resources, Inc. Consolidated Statements of Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Retained ​ Total ​ Common Paid- Earnings Stockholders' In thousands Stock in Capital (Deficit) Equity Balance at January 1, 2020 ​ $ 410 ​ ​ 154,957 ​ ​ 14,716 ​ ​ 170,083 Restricted stock surrendered for withholding taxes payable ​ ​ ( 1 ) ​ ​ ( 220 ) ​ ​ — ​ ​ ( 221 ) Stock-based compensation ​ 18 ​ 4,122 ​ — ​ 4,140 Net loss ​ — ​ — ​ ( 4,907 ) ​ ( 4,907 ) Balance at December 31, 2020 ​ ​ 427 ​ ​ 158,859 ​ ​ 9,809 ​ ​ 169,095 Restricted stock surrendered for withholding taxes payable ​ ​ ( 1 ) ​ ​ ( 538 ) ​ ​ — ​ ​ ( 539 ) Stock-based compensation ​ 15 ​ 5,245 ​ — ​ 5,260 Dividends declared ​ ​ — ​ ​ — ​ ​ ( 2,501 ) ​ ​ ( 2,501 ) Net income ​ — ​ — ​ 39,759 ​ 39,759 Balance at December 31, 2021 ​ ​ 441 ​ ​ 163,566 ​ ​ 47,067 ​ ​ 211,074 Restricted stock surrendered for withholding taxes payable ​ ​ ( 2 ) ​ ​ ( 3,181 ) ​ ​ — ​ ​ ( 3,183 ) Stock options exercised ​ ​ — ​ ​ 107 ​ ​ — ​ ​ 107 Stock-based compensation ​ 3 ​ 8,219 ​ — ​ 8,222 Dividends declared ​ ​ — ​ ​ — ​ ​ ( 23,064 ) ​ ​ ( 23,064 ) Net income ​ — ​ — ​ 116,042 ​ 116,042 Balance at December 31, 2022 ​ $ 442 ​ $ 168,711 ​ $ 140,045 ​ $ 309,198 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 82 Table of Contents Ramaco Resources, Inc. Consolidated Statements of Cash Flows ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, In thousands ​ 2022 2021 2020 Cash flows from operating activities: ​ ​ ​ ​ Net income (loss) ​ $ 116,042 ​ $ 39,759 ​ $ ( 4,907 ) Adjustments to reconcile net income to net cash from operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Accretion of asset retirement obligations ​ 1,115 ​ 615 ​ 570 Depreciation, depletion, and amortization ​ 41,194 ​ 26,205 ​ 20,912 Amortization of debt issuance costs ​ 491 ​ 214 ​ 58 Stock-based compensation ​ 8,222 ​ 5,260 ​ 4,140 Loss on disposal of equipment ​ ​ 756 ​ ​ — ​ ​ — Other income - gain on sale of mineral rights ​ ​ ( 2,113 ) ​ ​ — ​ ​ — Other income - employee retention tax credit ​ ​ — ​ ​ ( 5,407 ) ​ ​ — Other income - PPP loan ​ ​ — ​ ​ — ​ ​ ( 8,444 ) Deferred income taxes ​ 29,229 ​ 4,644 ​ ( 3,503 ) Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Accounts receivable ​ 3,279 ​ ( 24,154 ) ​ ( 1,043 ) Prepaid expenses and other current assets ​ ( 14,378 ) ​ 5,519 ​ 986 Inventories ​ ( 29,182 ) ​ ( 3,844 ) ​ 3,314 Other assets and liabilities ​ 1,127 ​ 1,124 ​ ( 1,270 ) Accounts payable ​ 12,727 ​ ( 1,820 ) ​ 2,753 Accrued expenses ​ 19,361 ​ 5,225 ​ ( 254 ) Net cash provided by operating activities ​ 187,870 ​ 53,340 ​ 13,312 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flow from investing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital expenditures ​ ( 123,012 ) ​ ( 29,466 ) ​ ( 24,753 ) Acquisition of Ramaco Coal assets ​ ​ ( 11,738 ) ​ ​ — ​ ​ — Acquisition of Maben Coal assets ​ ​ ( 11,897 ) ​ ​ — ​ ​ — Acquisition of Amonate assets ​ ​ — ​ ​ ( 30,147 ) ​ ​ — Proceeds from sale of mineral rights ​ ​ 2,000 ​ ​ — ​ ​ — Other ​ ​ ( 1,061 ) ​ ​ — ​ ​ — Net cash used for investing activities ​ ​ ( 145,708 ) ​ ​ ( 59,613 ) ​ ​ ( 24,753 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Proceeds from PPP Loan ​ ​ — ​ ​ — ​ ​ 8,444 Proceeds from borrowings ​ 42,000 ​ 54,368 ​ 50,043 Proceeds from stock options exercised ​ ​ 107 ​ ​ — ​ ​ — Payments of debt issuance cost ​ ​ — ​ ​ ( 2,356 ) ​ ​ — Payment of dividends ​ ​ ( 20,041 ) ​ ​ — ​ ​ — Repayment of borrowings ​ ( 26,026 ) ​ ( 26,300 ) ​ ( 45,598 ) Repayment of Ramaco Coal acquisition financing - related party ​ ​ ( 15,000 ) ​ ​ — ​ ​ — Repayments of insurance financing ​ ​ ( 1,290 ) ​ ​ ( 862 ) ​ ​ ( 1,382 ) Repayments of equipment finance leases ​ ​ ( 5,062 ) ​ ​ ( 1,942 ) ​ ​ — Shares surrendered for withholding taxes payable ​ ​ ( 3,183 ) ​ ​ ( 539 ) ​ ​ ( 221 ) Net cash (used for) provided by financing activities ​ ( 28,495 ) ​ 22,369 ​ 11,286 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net change in cash and cash equivalents and restricted cash ​ 13,667 ​ 16,096 ​ ( 155 ) Cash and cash equivalents and restricted cash, beginning of period ​ 22,806 ​ 6,710 ​ 6,865 Cash and cash equivalents and restricted cash, end of period ​ $ 36,473 ​ $ 22,806 ​ $ 6,710 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Supplemental cash flow information: ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash paid for interest (net of $ 1,061 capitalized in 2022) ​ $ 5,997 ​ $ 1,601 ​ $ 1,095 Cash paid for taxes ​ 15,500 ​ 9 ​ 19 Non-cash investing and financing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Leased assets obtained under new financing leases ​ 7,888 ​ 10,002 ​ — Financed equipment purchases ​ ​ 6,409 ​ ​ — ​ ​ — Capital expenditures included in accounts payable and accrued expenses ​ 13,404 ​ 6,652 ​ 1,228 Ramaco Coal acquisition financing ​ 56,551 ​ — ​ — Maben Coal acquisition financing ​ ​ 21,000 ​ ​ — ​ ​ — Financed insurance ​ ​ 5,587 ​ ​ 280 ​ ​ 1,588 Accrued dividends payable ​ 5,524 ​ 2,501 ​ — ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 83 Table of Contents Ramaco Resources, Inc. Notes to Consolidated Financial Statements NOTE 1—DESCRIPTION OF BUSINESS Ramaco Resources, Inc. (“Ramaco”) is a Delaware corporation formed in October 2016. Our principal corporate offices are located in Lexington, Kentucky. We are an operator and developer of high-quality, low-cost metallurgical coal in southern West Virginia, southwestern Virginia, and southwestern Pennsylvania. As used herein, “the Company,” “we,” “us,” “our,” and similar terms include Ramaco Resources, Inc. and its subsidiaries, unless the context indicates otherwise. Our development portfolio primarily includes the following properties: Elk Creek, Berwind, Knox Creek and RAM Mine. Each of these properties possesses geologic and logistical advantages that make our coal among the lowest delivered-cost U.S. metallurgical coal to our domestic target customer base, North American blast furnace steel mills and coke plants, as well as international metallurgical coal consumers. In addition, the Company completed acquisitions of Ramaco Coal, LLC (“Ramaco Coal”) and Maben Coal, LLC (“Maben Coal”) in the second and third quarter of 2022, respectively. With the Ramaco Coal acquisition, we control mineral deposits near Sheridan, Wyoming along with facilities that house research and development activities. With the Maben Coal acquisitions, the Company has obtained control of additional coal deposits in Wyoming County and Raleigh County, West Virginia. Our operations include three deep mines and a surface mine at our Elk Creek mining complex (the “Elk Creek Complex”). Development of this complex commenced in 2016 and included construction of a preparation plant and rail load-out facilities. The Elk Creek property consists of approximately 20,200 acres of controlled mineral rights and contains approximately 16 seams that we have targeted for production. The Company commenced expansion of the Elk Creek preparation plant during 2022 to increase production in future periods. Development of our Berwind mining complex (the “Berwind Complex”) began in late-2017. In 2020, we suspended development at the Berwind Complex due to lower pricing and demand largely caused by the COVID-19 outbreak. In early-2021, as pricing and demand improved, Berwind development was restarted. We successfully reached the thicker Pocahontas No. 4 seam in late 2021. In December 2021, we completed the acquisition of “Amonate Assets” from subsidiaries of Coronado Global Resources Inc. (“Coronado”), which include controlled mineral rights and a processing plant located in our Berwind Complex, saving us transportation costs to our Knox Creek plant 26 miles away. The Berwind Complex experienced an ignition event during 2022 that resulted in idling mining operations for one of the active mines. Production from the affected mine restarted in the first quarter of 2023. Our Knox Creek facility includes a preparation plant and controlled mineral rights that we expect to develop in the future. The Knox Creek preparation plant processes coal from our Berwind Complex (until the newly acquired plant at the Berwind Complex is placed into operation) as well as coal mined from the rights acquired in the Maben Coal transaction and coal purchased from third parties. Our RAM Mine property is located in southwestern Pennsylvania and is scheduled for initial production after a mining permit is issued and market conditions warrant development. COVID-19— Uncertainty related to COVID-19 continues to linger across the world. The Company actively monitors for developments and may take further actions altering our business operations that we determine are in the best interests of our employees, customers, suppliers, and stakeholders, or as required by federal, state, or local authorities. Russia/Ukraine Conflict --Regarding the military conflict involving Russia and Ukraine, resulting sanctions and future market or supply disruptions in the region, are impossible to predict, but could be significant and may have a severe adverse effect on the region. Globally, various governments have banned imports from Russia including commodities such as oil, natural gas and coal. These events have contributed to volatility in the commodity markets. This volatility, including market expectations of potential changes in coal prices and inflationary pressures on steel 84 Table of Contents products, may have a significant effect on market prices and overall demand for our coal and the cost of supplies and equipment. We are closely monitoring the potential effects on the market. We have no meaningful direct financial exposure to Russia and Ukraine; however, the European Union ban on Russian coal has put upward pressure on international thermal coal prices. In addition, fear of economic contraction may affect future demand for coking coal. NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Consolidation —The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and U.S. Securities and Exchange Commission regulations. The financial statements are presented on a consolidated basis for all periods presented. All significant intercompany balances and transactions between consolidated entities have been eliminated in consolidation. Use of estimates —The preparation of these financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates are related to the quantity and value of coal inventories, stock-based compensation, asset retirement obligations, occupational disease obligations, evaluation of long-lived assets for impairment, and the quantities and values of coal reserves, depletion and amortization, useful lives, and income taxes. Revenue Recognition —Our primary source of revenue is from the sale of coal through contracts with steel producers usually having durations of less than one year. Revenue is recognized when performance obligations under the terms of a contract with our customers are satisfied. This occurs when control of the coal is transferred to our customers. For coal shipments to domestic customers via rail, control is generally transferred when the railcar is loaded. Control is transferred for export coal shipments to customers via ocean vessel when the vessel is loaded at the port. Our coal sales generally include up to 90-day payment terms following the transfer of control of the goods to our customer. In the case of some of our foreign customers, our contracts also require that letters of credit are posted to secure payment of any outstanding receivable. We do not include extended payment terms in our contracts. Our contracts with customers typically provide for minimum specifications or qualities of the coal we deliver. Variances from these specifications or qualities are settled by means of price adjustments. Generally, these price adjustments are settled within 30 days of delivery and are insignificant. Certain of our contracts with customers include provisions in which the price is derived from an index. If control of the goods transfers to the customer in the period before the final price is determined, revenue is recorded based on the estimated consideration to be received. The Company estimates the amount to which it expects to receive by reference to forward curve or other relevant data. These estimates have not been constrained for accounting purposes due to the short period of time over which the uncertainty is resolved. Freight Revenue and Expense —Costs incurred to transport coal to the point of sale at the port facility are included in cost of sales and the gross amounts billed to customers to cover shipping to and handling of the coal at the port are included in revenue. Cash and Cash Equivalents —We classify all highly-liquid instruments with an original maturity of three months or less as cash equivalents. Restricted cash balances at December 31, 2022 and December 31, 2021 were $ 0.9 million and consisted of funds held in escrow for potential future workers’ compensation claims. Restricted cash balances were included in other current assets on the consolidated balance sheets. Inventories — Coal is reported as inventory at the point in time it is extracted from the mine. Coal inventories are valued at the lower of average cost or net realizable value, with cost determined on a first-in, first-out inventory valuation method. Coal inventory costs include labor, supplies, equipment costs, freight, operating overhead, 85 Table of Contents depreciation and amortization. Coal inventory quantities are adjusted periodically based on aerial surveys of coal stockpiles. Supply inventories are valued at average cost. Coal inventories at December 31, 2022, were made up of $ 22.4 million of raw coal, $ 18.2 million of saleable coal, and $ 4.4 million of supplies. Coal inventories at December 31, 2021, were made up of $ 12.5 million of saleable coal, $ 2.6 million of supplies, and $ 0.7 million of raw coal. Property, Plant and Equipment —Property, plant and equipment is recorded at cost. Expenditures which extend the useful lives of existing plant and equipment are capitalized. Planned major maintenance costs which do not extend the useful lives of existing plant and equipment are expensed as incurred. When assets are retired or otherwise disposed, the related cost and accumulated depreciation are removed from the respective accounts and any profit or loss on disposition is recognized in the consolidated statements of operations. Coal exploration costs are expensed as incurred. Coal exploration costs include those incurred to ascertain existence, location, extent or quality of ore or minerals before beginning the development stage of the mine. Mining property and mineral rights costs represent the costs incurred to acquire the rights to access and mine certain coal property either through deeds, leases, or other conveyance agreements. These costs include costs of acquiring, and accessing mineral reserves, resources and surface areas for mining activities. Mine development begins when the facts and circumstances clearly establish the presence of a commercial mineralized deposit. Capitalized mine development costs represent the costs incurred to prepare mine sites and/or seams of coal for future mining. These costs include costs of acquiring, permitting, planning, research, and developing access to identified mineral reserves and other preparations for commercial production as necessary to develop and permit the properties for mining activities. When components of capitalized mine development costs are replaced with new components, the Company capitalizes the replacement as a separate component and charges off the net book value of the component that was replaced at the cease-use date. If it is determined that an undeveloped mineral interest cannot be economically converted into proven and probable reserves, capitalized costs are assessed for impairment and future development costs are expensed as incurred. Operating expenditures including certain professional fees and overhead costs are not capitalized but are expensed as incurred. Mineral rights and capitalized mine development costs are depleted and amortized on a units-of-production basis as mining of that mine’s assigned reserves takes place. Depreciation of plant and equipment is calculated on the straight-line method over their estimated useful lives ranging from three to thirty years . Advanced Coal Royalties —In most cases, we acquire the right to mine coal reserves under leases which call for the payment of royalties on coal as it is mined and sold. In many cases, these mineral leases require the payment of advance or minimum coal royalties to lessors that are recoupable against future production royalties. These advance payments are deferred and charged to operations as the coal reserves are mined. Impairment of Long-lived Assets —We review and evaluate held-and-used long-lived assets, including property, plant and equipment and mine development costs, for impairment when events or changes in circumstances indicate that the asset or asset group’s carrying value may not be recoverable. Recoverability is measured by comparing the carrying amount of the asset or asset group to the estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of the asset or asset group exceeds its estimated undiscounted future cash flows, an impairment loss is recorded for the excess of the carrying amount over the estimated fair value, if any. We may, under limited circumstances, idle mining operations in response to certain events or conditions. Because an idling is not a permanent closure, it is not considered an automatic indicator of impairment. Asset Retirement Obligations —Legal obligations associated with the retirement of long-lived assets are initially recognized at their estimated fair value, with a corresponding charge to capitalized development costs, at the time they are incurred. Our asset retirement obligations primarily consist of spending estimates related to reclaiming metallurgical coal land and support facilities in accordance with federal and state reclamation laws as defined by each mining permit. Spending estimates are adjusted for inflation and then discounted at the credit-adjusted, risk-free rate. We record the fair 86 Table of Contents value of a liability for an asset retirement obligation in the period in which it is incurred and a corresponding increase in the carrying amount of the related long-lived asset. The liability is accreted to its present value each period and the capitalized cost is amortized using the units-of-production method over estimated recoverable reserves upon commencement of mining. We review our asset retirement obligations on at least an annual basis for significant changes in the estimated timing or amount of cash flows. Occupational Disease (Pneumoconiosis) Obligations . We recognize as a liability to provide for occupational disease (pneumoconiosis) benefits to eligible employees, former employees and dependents as required by the Federal Mine Safety and Health Act of 1969, as amended. The occupational disease benefit obligation represents the present value of the actuarially computed liabilities for such benefits over the employees’ applicable years of service. Estimating our occupational disease (pneumoconiosis) benefits obligation requires management to make estimates and judgments regarding timing and existence of a liability utilizing third-party actuaries to assist in preparing what constitutes adequate liability amounts. Inherent in the calculation are numerous assumptions and judgments including the ultimate costs, inflation factors, credit adjusted discount rates, timing of settlement awards in the legal and regulatory environments. Adjustments to estimated liabilities due to changes in actuarial assumptions are recorded immediately in earnings in the period in which the change in estimate occurs. O ther Income —We accounted for the SBA Paycheck Protection Program Loan (“PPP Loan”) as an in-substance government grant because we expected to meet the PPP Loan forgiveness eligibility criteria and concluded that the loan represents, in substance, a grant that is expected to be forgiven. Proceeds from the PPP Loan were initially recognized as a deferred income liability. Subsequently, we reduced this liability and recognized income on a systematic basis over the period in which the related costs for which the PPP Loan was intended were incurred. PPP Loan income is presented as other income within the consolidated statements of operations for 2020. In addition, we recognized $ 5.4 million associated with the Coronavirus Aid, Relief and Economic Security Act Employee Retention Tax Credit as other income within the consolidated statements of operations for 2021. Leases —We determine if an arrangement is or contains a lease at contract inception, and lease classification is determined at the commencement date. Leases are recognized on the balance sheet as right-of-use (“ROU”) assets and lease liabilities except for leases with a term of 12 months or less. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating and finance lease ROU assets and liabilities are recognized at commencement date based on the present value of the fixed lease payments over the lease term. The Company does not separate lease and non-lease components for all leases as permitted under the accounting guidance for leases. As most of our leases do not contain a readily determinable implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating and finance lease ROU assets also include lease prepayments made by the Company and are reduced by any lease incentives received by the Company prior to commencement. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. For operating leases, lease expense is recorded in the income statement based on a straight-line recognition of the total fixed payments over the lease term. For finance leases, accretion of the liability is recognized as interest expense and the ROU asset is amortized separately on a straight-line basis similar to the depreciation of equipment owned by the Company. Leases of mineral reserves and the related land leases are exempted under U.S. GAAP from recognition on the consolidated balance sheets. Fair Value Measurements — Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities that are recognized or disclosed at fair value are categorized in the fair value hierarchy based on the observability of the inputs utilized in the valuation. The levels of the hierarchy include: Level 1 - inputs are quoted prices in active markets for the identical assets or liabilities; Level 2 - inputs are other than quoted prices included in Level 1 that are directly or 87 Table of Contents indirectly observable through market-corroborated inputs; and Level 3 - inputs are unobservable, or observable but cannot be market-corroborated, requiring us to make assumptions about pricing by market participants. The fair values of cash and cash equivalents, accounts receivable, restricted cash, and accounts payable approximate their carrying amounts at each reporting date. The Company’s Senior Notes have an estimated fair value of $ 36 million and $ 38 million at December 31, 2022 and 2021, respectively. The fair values of the Company’s Senior Notes were based on observable market prices and were considered a Level 2 measurement at December 31, 2022 and a Level 1 measurement at December 31, 2021 based on trading volumes. The difference between the fair value and carrying amount of the Company’s remaining debts is not material due to the similarity between the terms of the debt agreements and prevailing market terms available to the Company. Nonrecurring fair value measurements of the Company include asset retirement obligations and estimated values used to allocate the acquisition cost of long-lived assets to individual assets, neither of which are subject to the fair value disclosure requirements. The fair value of asset retirement obligations is determined as the present value of estimated cash flows related to reclamation obligations, which is likely a Level 3 measurement due the use of unobservable inputs such as estimates regarding the amount and timing of costs to be incurred, the Company’s credit-adjusted discount rate, and inflation rates. The consideration for the Company’s acquisitions was allocated based on the relative fair values of the assets acquired, the primary asset of which was mineral rights. The fair values of mineral rights were determined based on Level 3 inputs, which are generally unobservable, requiring the Company to make assumptions about future coal prices, capital expenditures, future coal production, costs of production, and an appropriate rate at which to discount the future cash flows. Income Taxes —Income tax expense (benefit) includes Federal and state income taxes. Certain income and expenses are not reported in tax returns and financial statements in the same year. The tax effect of such temporary differences is reported as deferred income taxes. We account for deferred income taxes by applying statutory tax rates in effect at the reporting date of the balance sheet. A valuation allowance is established if it is more likely than not that the related tax benefits will not be realized. In determining the appropriate valuation allowance, we consider the projected realization of tax benefits based on expected levels of future taxable income, available tax planning strategies and reversals of existing taxable temporary differences. Uncertain tax positions are recognized only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. We had no uncertain tax positions requiring liability recognition as of December 31, 2022 and 2021. We file income tax returns in the U.S. and in various state and local jurisdictions which may be routinely examined by tax authorities. The statute of limitations is currently open for all tax returns filed. Segment Reporting —Our properties located in West Virginia, Virginia and Pennsylvania each consist of mineral reserves for production of metallurgical coal from both underground and surface mines. These operations are within the Appalachian basin. Geology, coal transportation routes to customers, regulatory environments and coal quality or type are characteristic to a basin. For financial reporting purposes, these operations represent a single segment because each possesses similar production methods, distribution methods, and customer quality and consumption characteristics, resulting in similar long-term expected financial performance. The Ramaco Coal acquisition in 2022, as discussed in greater detail in Note 4, provides the Company with royalty savings and controlled mineral rights as well as a research and pilot facility located near Sheridan, Wyoming related to the Company’s possible expansion into the manufacturing and commercialization of advanced carbon products and materials from coal. The Wyoming property includes a thermal coal deposit and permit and is currently undergoing mineral analysis and core drilling to assess potential concentrations of rare earth elements. The Company refers to this potentially new business line as “CORE” (Carbon Ore-Rare Earth), signifying its focus on carbon ore and rare earth elements. 88 Table of Contents CORE represents a separate operating segment and has economic and geographic differences compared to the Company’s metallurgical operations in the Appalachian basin; however, CORE does not meet the significance tests for separate disclosure as a reportable segment at this time. In addition, reconciling items of the metallurgical coal segment to the Company’s consolidated results are not yet material. The chief operating decision maker does not regularly review segment asset information for the purpose of assessing performance and making resource allocation decisions. Stock-Based Compensation —Compensation cost for equity awards is based on the grant-date fair value of the award and is recognized over the requisite service period. Forfeitures are recognized as they occur. The fair values of restricted stock and restricted stock unit awards having only a service condition were determined using the publicly-traded price of our common stock on the grant date. The fair value of performance stock units, which vest based on the achievement of relative total shareholder return goals, was determined on the date of grant based on a Monte Carlo simulation. The fair value of stock option awards was calculated using the Black-Scholes option-pricing model. The Black-Scholes model requires us to make assumptions and judgments about the variables used in the calculation, including the expected term, expected volatility, risk-free interest rate, dividend rate and service period. Concentrations —Our operations are all related to metallurgical coal within the mining industry. A reduction in metallurgical coal prices or other disturbances in the metallurgical coal markets could have an adverse effect on our operations. In 2022, 2021, and 2020, approximately 58 %, 51 %, and 71 %, respectively, of our revenue was derived from coal shipments to customers in North American markets. Financial instruments that potentially subject us to a significant concentration of credit risk consist primarily of cash and cash equivalents, restricted cash and accounts receivable. We maintain deposits in federally insured financial institutions in excess of federally insured limits. We monitor the credit ratings and concentration of risk with these financial institutions on a continuing basis to safeguard cash deposits. We have a limited number of customers. Contracts with these customers provide for billings principally upon shipment and compliance with payment terms is monitored on an ongoing basis. Outstanding receivables beyond payment terms are promptly investigated and discussed with the specific customer. We estimate an allowance for doubtful accounts by taking into consideration the age of past due accounts and an assessment of our customers’ ability to pay. An allowance for doubtful accounts was not necessary as of December 31, 2022 and 2021. During 2022, sales to two customers accounted for approximately 38 % of total revenue. The total balance due from these customers at December 31, 2022 was approximately 32 % of total accounts receivable. During 2021, sales to three customers accounted for approximately 58 % of total revenue. The total balance due from these customers at December 31, 2021 was approximately 58 % of total accounts receivable. During 2020, sales to three customers accounted for approximately 70 % of total revenue. The number of customers comprising the concentrations above is based on a threshold of 10% or more of total revenues and related receivables. Recent Accounting Pronouncements Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses , which replaces the existing incurred loss impairment model with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. We adopted this standard effective January 1, 2020. The adoption of this ASU did not have a material impact on our consolidated financial statements because we do not have a history of credit losses on our financial instruments and have no material expected losses. ​ In August 2018, the FASB issued ASU 2018-15, Internal-Use Software , which addresses the accounting for implementation costs associated with a hosted service. The standard provides that implementation costs be evaluated for capitalization using the same criteria as that used for internal-use software development costs, with amortization expense being recorded in the same income statement expense line as the hosted service costs and over the expected term of the 89 Table of Contents hosting arrangement. We adopted this standard as of January 1, 2020, on a prospective basis. The adoption of this ASU did not have a material impact on our consolidated financial statements. ​ In December 2019, the FASB issued ASU 2019-12, Income Taxes , which enhances and simplifies various aspects of the income tax accounting guidance, including requirements such as tax basis step-up in goodwill obtained in a transaction that is not a business combination, ownership changes in investments, and interim-period accounting for enacted changes in tax law. The standard was effective for us in the first quarter of 2021. The adoption of this ASU did not have a material impact on our consolidated financial statements. ​ In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which became effective immediately. The amendments in ASU 2020-04 provide optional relief regarding the accounting effects of reference rate reform, including various types of contract modifications (e.g., debt) as well as hedging relationships. Overall, the guidance permits financial reporting that generally reflects the intended continuation of contracts that reference rates, such as the London Interbank Offered Rate (“LIBOR”), that are expected to be discontinued as a result of reference rate reform initiatives. In December 2022, the FASB issued ASU 2022-06, which defers the sunset date of ASC 848 from December 31, 2022 to December 31, 2024. The Company had previously entered into a term loan that referenced LIBOR; however, this debt was repaid in the fourth quarter of 2022 and, therefore, a contract amendment to replace LIBOR is not required. The Company is unaware of any additional references to rates that will be discontinued under reform initiatives. ​ NOTE 3—PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (In thousands) ​ 2022 2021 Plant and equipment ​ $ 232,885 ​ $ 167,019 Mining property and mineral rights ​ ​ 120,760 ​ ​ 26,064 Construction in process ​ 34,698 ​ 9,972 Capitalized mine development costs ​ 153,436 ​ 104,291 Less: accumulated depreciation and amortization ​ ( 111,937 ) ​ ( 80,269 ) Total property, plant and equipment, net ​ $ 429,842 ​ $ 227,077 ​ Capitalized amounts related to coal reserves at properties where we are not currently engaged in mining operations totaled $ 33.4 million as of December 31, 2022 and $ 25.1 million as of December 31, 2021. In addition to the amounts discussed above, on July 10, 2022, the Company experienced a methane ignition at the Berwind No. 1 mine, which was one of the active mines at our Berwind mining complex. The other mines resumed production while the Berwind No. 1 mine was idled until a full investigation could be conducted. There were no personnel in the mine at the time of the incident and no injuries or fatalities occurred. The overall impact to pre-tax earnings in 2022 was immaterial except for idle mine costs of $ 9.5 million recognized during the year. Production from the Berwind No. 1 mine restarted in the first quarter of 2023. Mining property and mineral rights are made up primarily of significant asset acquisitions that occurred in 2022 and 2021. Refer to Note 4 for more information. 90 Table of Contents Depreciation, depletion, and amortization included: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, (In thousands) 2022 2021 2020 Depreciation of plant and equipment ​ $ 24,132 ​ $ 17,945 ​ $ 17,094 Amortization of right of use assets (finance leases) ​ ​ 4,846 ​ ​ 1,109 ​ ​ — Amortization and depletion of ​ ​ ​ ​ ​ ​ ​ ​ ​ capitalized mine development costs and mineral rights ​ 12,216 ​ 7,151 ​ ​ 3,818 Total depreciation, depletion, and amortization ​ $ 41,194 ​ $ 26,205 ​ $ 20,912 ​ ​ NOTE 4—ACQUISITIONS Ramaco Coal ​ On April 29, 2022, the acquisition of Ramaco Coal, an entity owned by an investment fund managed by Yorktown Partners and certain members of the Company's management, was completed pursuant to a Purchase and Sale Agreement, dated February 23, 2022. The purchase price was approximately $ 65 million, consisting of an initial payment of $ 10 million paid at closing and a deferred purchase price of $ 55 million to be paid during the remainder of 2022 in $ 5 million ratable quarterly installments, and $ 10 million ratable quarterly installments to be paid in 2023 plus interest at a rate of 9 %. ​ Ramaco Coal controls certain coal mineral interests of principally metallurgical coal properties which are owned in fee or leased under long-term leases that are, in turn, leased or subleased to the Company and various third parties. Such lessees pay a royalty based on the amount of metallurgical coal mined and the realized price per ton. ​ Ramaco Coal also controls a large thermal coal deposit and permit near Sheridan, Wyoming covering approximately 16 thousand acres, including a research and development facility and associated equipment and has a goal of converting coal to carbon products, such as graphene, graphite and carbon fiber. ​ Concurrent with this acquisition, the Company and Ramaco Coal each sold certain mineral rights located in West Virginia (the “Split Ridge Arrangement”). To compensate for the sale of these rights, we received an overriding royalty arrangement which included $ 2 million up front and $ 125 thousand quarterly minimum royalty payment beginning in January 2024 until December 2028. The fair value of this arrangement was $ 3.7 million, of which, $ 1.6 million was treated as an allocation of the fair value of this disposed component of Ramaco Coal and, separately, a $ 2.1 million gain on the sale of the Company’s mineral rights included in Other income (expense), net on the 2022 Consolidated Statement of Operations. ​ The acquisition of Ramaco Coal was accounted for as a purchase of assets due to substantially all of the fair value being concentrated in a single asset, the rights to metallurgical coal deposits. The consideration paid in connection with the acquisition of Ramaco Coal, including $ 1.6 million in closing costs, relinquishment of $ 1.6 million of prepaid royalties and $ 0.1 million paid to a mineral owner as part of the acquisition, was approximately $ 68.3 million and was allocated based on fair values to mining property and mineral rights ($ 65.1 million), buildings ($ 2.6 million) and equipment ($ 0.6 million). Refer to Note 7 for a description of the acquisition financing. ​ Maben Coal ​ On September 23, 2022, the Company completed the acquisition of 100 % of the equity interests of Maben Coal, LLC (“Maben Coal”) pursuant to the Securities Purchase Agreement dated August 8, 2022, with Appleton Coal, LLC. The purchase price was approximately $ 30.0 million, consisting of an initial payment of $ 9.0 million and proceeds from a new two-year loan in the amount of $ 21.0 million. The Company also paid approximately $ 1.7 million of transaction costs and recognized liabilities of $ 1.3 million on the closing date, primarily related to $ 1.2 million of cash bond replacement obligations incurred by the Company as part of the transaction. In October 2022, the Company paid 91 Table of Contents off the $ 1.2 million cash bond replacement obligation to Appleton Coal, LLC, which has been included in the investing activities section of the statement of cash flows. ​ We acquired a large coal deposit on approximately 28 thousand leased acres located in Wyoming County and Raleigh County, West Virginia. We assumed existing mining permits issued by the West Virginia Department of Environmental Protection, which authorize mining by both surface and highwall mining methods as well as by underground methods. The property also has issued permits covering an existing haul road, as well as an active refuse disposal area together with a preparation plant and unit train loadout, neither of which had been constructed as of the closing date. ​ The acquisition of Maben Coal was accounted for as a purchase of assets due to substantially all of the fair value being concentrated in a single asset, the rights to leased metallurgical coal deposits. The total consideration of approximately $ 33.0 million was allocated to mining property and mineral rights ($ 30.6 million), capitalized mine development costs ($ 1.0 million), receivable for the right to recover cash bond replacement payments made by the Company as discussed above ($ 1.2 million), and recoupable royalties ($ 0.2 million). Refer to Note 7 for information regarding the acquisition financing. ​ Amonate Assets In December 2021, we acquired what are referred to as the “Amonate Assets” from Coronado, pursuant to an asset purchase agreement. The acquisition, for a total cash consideration of $ 30 million, included a mine complex located in McDowell County, West Virginia and Tazewell County, Virginia adjacent and contiguous to the Company’s existing Berwind Complex. The acquisition primarily consists of high quality, low and mid-vol metallurgical coal reserves and resources, much of which will be mined from the Company’s Berwind Complex. Also purchased were several additional permitted mines and a currently idled 1.3 -million-ton per annum capacity coal preparation plant. NOTE 5—ASSET RETIREMENT OBLIGATIONS We estimate asset retirement obligations (“ARO”) for final reclamation based upon detailed engineering calculations of the amount and timing of the future cash spending for a third-party to perform the required work. Amounts recorded related to asset retirement obligations were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (In thousands) 2022 2021 Balance at beginning of year ​ $ 22,549 ​ $ 15,156 Additional asset retirement obligations acquired/incurred ​ 1,440 ​ 6,919 Expenditures made ​ ​ — ​ ​ ( 62 ) Accretion expense ​ 1,115 ​ 615 Revisions to estimates ​ 3,781 ​ ( 79 ) Balance at end of year ​ $ 28,885 ​ $ 22,549 ​ ​ ​ NOTE 6—ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIES Accrued expenses at December 31, 2022 consisted of accrued compensation and related benefits of $ 14.3 million, accrued purchases of $ 11.5 million, and various other liabilities. Accrued expenses at December 31, 2021 consisted of accrued compensation and related benefits of $ 5.6 million, accrued purchases of $ 2.8 million, and various other liabilities. The Company sponsors a defined contribution plan to assist eligible employees in providing for their future retirement needs. The Company’s contributions to the plan totaled $ 2.3 million, $ 1.2 million, and $ 0.9 million for the years ended December 31, 2022, 2021, and 2020, respectively. ​ Other long-term liabilities were comprised primarily of worker’s compensation and occupational disease obligations discussed below. ​ 92 Table of Contents Workers’ Compensation and Occupational Disease Obligations ​ We are self-insured for certain losses relating to workers’ compensation claims and occupational disease obligations under the Federal Mine Safety and Health Act of 1969, as amended. We purchase insurance coverage to reduce our exposure to significant levels of these claims. Self-insured losses are accrued based upon estimates of the aggregate liability for uninsured claims incurred as of the balance sheet date using current and historical claims experience and certain actuarial assumptions. The occupational disease benefit obligation represents the present value of the actuarially computed liabilities for such benefits over the employees’ applicable years of service. The occupational disease benefit liability was calculated using a discount rate of 5.60 % and 3.26 % at December 31, 2022 and 2021, respectively. ​ As of December 31, 2022, the estimated aggregate liability for uninsured claims totaled $ 3.6 million, including $ 1.5 million of occupational disease obligations. Of the aggregate liability, $ 2.7 million was included in other long-term liabilities within the consolidated balance sheets. As of December 31, 2021, the estimated aggregate liability for uninsured claims totaled $ 3.9 million, including $ 1.4 million of occupational disease obligations. Of the aggregate liability, $ 2.4 million was included in other long-term liabilities within the consolidated balance sheets. ​ NOTE 7—DEBT Our outstanding debt consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (In thousands) 2022 2021 Term loan ​ $ — ​ $ 3,334 Revolving Credit Facility ​ 25,000 ​ — Equipment loans ​ ​ 8,396 ​ ​ 7,679 Senior Notes, net ​ 32,830 ​ 32,363 Financing of Ramaco Coal acquisition - Related party debt ​ ​ 40,000 ​ ​ — Financing of Maben Coal acquisition ​ ​ 21,000 ​ ​ — Total debt ​ $ 127,226 ​ $ 43,376 Current portion of long-term debt ​ 75,639 ​ 7,674 Long-term debt, net ​ $ 51,587 ​ $ 35,702 ​ Revolving Credit Facility and Term Loan — On November 2, 2018, we entered into a Credit and Security Agreement (as amended or amended and restated) with KeyBank National Association (“KeyBank”), as the administrative agent, and other lenders party thereto. The Credit Agreement was amended on February 20, 2020 and March 19, 2021. On October 29, 2021, we entered into the Amendment and Restatement with KeyBank. Prior to the Amendment and Restatement, the Credit Agreement consisted of the $ 10.0 million Term Loan and up to $ 30.0 million revolving line of credit, including $ 3.0 million letter of credit availability. The Amendment and Restatement increased the overall availability under the revolving credit line to $ 40.0 million and extended the maturity date to December 31, 2024. All personal property assets, including, but not limited to accounts receivable, coal inventory and certain mining equipment are pledged to secure the Revolving Credit Facility. On April 29, 2022, we entered into the First Amendment to the Amended and Restated Credit and Security Agreement with KeyBank to allow for the Ramaco Coal acquisition. On September 23, 2022, we entered into a Second Amendment to the Amended and Restated Credit and Security Agreement with KeyBank to allow for the Maben Coal acquisition. The Revolving Credit Facility has a maturity date of December 31, 2024 and bears interest based on the Secured Overnight Financing Rate (“SOFR”) + 2.0 % or Base Rate + 1.5 %. “Base Rate” is the highest of (i) KeyBank’s prime rate, (ii) Federal Funds Effective Rate + 0.5 %, or (iii) SOFR + 2.0 %. Advances under the Revolving Credit Facility are made initially as Base Rate loans but may be converted to SOFR rate loans at certain times at our discretion. At December 31, 2021, the borrowing base was $ 38.5 million and there were $ 25.0 million of borrowings outstanding under the facility, leaving $ 13.5 million of remaining availability. 93 Table of Contents The Term Loan is secured under a Master Security Agreement with a pledge of certain underground and surface mining equipment, bears interest at LIBOR + 5.15 % and is required to be repaid in monthly installments of $ 278 thousand including accrued interest. The term loan was repaid in full as of December 31, 2022. The Credit Agreement contains usual and customary covenants including limitations on liens, additional indebtedness, investments, restricted payments, asset sales, mergers, affiliate transactions and other customary limitations, as well as financial covenants. At December 31, 2022, we were in compliance with all financial covenants under the Credit Agreement. Key Equipment Finance Loan— On April 16, 2020, we entered into an equipment loan with Key Equipment Finance, a division of KeyBank, as lender, in the principal amount of approximately $ 4.7 million for the financing of existing underground and surface equipment (the “Equipment Loan”). The Equipment Loan bears interest at 7.45 % per annum and is payable in 36 monthly installments of $ 147 thousand. There is a 3 % premium for prepayment of the note within the first 12 months. This premium declines by 1 % during each successive 12-month period. The outstanding principal balance was $ 0.6 million at December 31, 2022. J. H. Fletcher & Co. Loan— On July 23, 2021 and November 24, 2021, we entered into equipment loans with J. H. Fletcher & Co., as lender, in the principal amount of approximately $ 0.9 million and $ 3.9 million, respectively, for the financing of underground equipment (the “Fletcher Equipment Loan”). The Fletcher Equipment Loan bears interest at 0 % per annum and is payable in 24 monthly installments totaling $ 200 thousand. In the third quarter of 2022, we obtained additional equipment loans of $ 4.4 million. The 2022 loans bear no interest and are payable in 24 monthly installments of $ 195 thousand. The total outstanding principal balance of the Fletcher Equipment Loans was $ 6.1 million at December 31, 2022. Komatsu Financial Limited Partnership Loan— On August 16, 2021, we entered into an equipment loan with Komatsu Financial Limited Partnership, as lender, in the principal amount of approximately $ 1.0 million for the financing of surface equipment (the “Komatsu Equipment Loan”). The Komatsu Equipment Loan bears interest at 4.6 % per annum and is payable in 36 monthly installments of $ 36 thousand for the first six months and then at $ 28 thousand until maturity. The outstanding principal balance of the Komatsu Equipment Loan was $ 0.5 million at December 31, 2022. Brandeis Machinery & Supply Company— On January 11, 2022, we entered into equipment loans with Brandeis Machinery & Supply Company, as lender, in the principal amount of $ 1.4 million for the financing of surface equipment (the “Brandeis Equipment Loans”). The Brandeis Equipment Loans bear interest at 4.8 % per annum and are payable in 48 monthly installments. Additional equipment loans of $ 0.6 million were entered into during October 2022. The outstanding principal balance of the Brandeis Equipment Loans was $ 1.2 million at December 31, 2022. 9.00% Senior Unsecured Notes due 2026— On July 13, 2021, we completed an offering of $ 34.5 million, in the aggregate, of the Company’s 9.00 % Senior Unsecured Notes due 2026 (the “Senior Notes”), less $ 2.4 million for issuance costs. The Senior Notes mature on July 30, 2026, unless redeemed prior to maturity. The Senior Notes bear interest at a rate of 9.00 % per annum, payable quarterly in arrears on the 30th day of January, April, July and October of each year, commencing on July 30, 2021. We may redeem the Senior Notes in whole or in part, at our option, at any time on or after July 30, 2023, or upon certain change of control events, at a redemption price equal to 100 % of the principal amount plus accrued and unpaid interest to, but not including, the date of redemption. Issuance costs for the Senior Notes included underwriters’ fees, attorney, accounting and filing costs totaling $ 2.4 million. These issuance costs are reported as a debt discount which is being amortized over the Senior Notes term using an effective rate method. The outstanding principal remains at $ 34.5 million; however, the balance of the Senior Notes reported at December 31, 2022 was $ 32.8 million, which is net of unamortized discounts and issuance costs of $ 1.7 million. The effective interest rate is approximately 10.45 %. ​ Ramaco Coal Deferred Purchase Price— On April 29, 2022, we acquired the assets of Ramaco Coal (see Note 4) and entered into an agreement whereby an investment fund managed by Yorktown Partners, as lender, provided financing for the acquisition in the principal amount of $ 55.0 (the “Ramaco Coal Loan”). The Ramaco Coal Loan bears interest at 9 % per annum and is payable in seven quarterly installments of $ 5 million for each remaining quarter in 2022 94 Table of Contents and $ 10 million for each quarter in 2023 until maturity. The outstanding principal balance of the Ramaco Coal Loan was $ 40.0 million at December 31, 2022 and is secured by the membership interests of Ramaco Coal, LLC. In the event we make an initial public offering of the equity interests of all or substantially all of the acquired assets of Ramaco Coal, the seller shall have the option to convert up to fifty percent ( 50 %) of the then outstanding principal balance, not to exceed $ 30 million, into a proportionate equity ownership in such initial public offering. Financing of Maben Coal Acquisition – On September 23, 2022, we acquired 100 % of the equity interests of Maben Coal, LLC (see Note 4) and entered into a secured loan with Investec Bank PLC in the amount of $ 21.0 million to pay a portion of the purchase price. The loan bears interest at the applicable secured overnight financing rate (“SOFR”) plus a margin of 3.0 % payable in cash, compounded monthly. Beginning in January 2023, the Company must start making monthly repayments of the outstanding principal in the amount of $ 800 thousand per month until the maturity date of September 23, 2024. The outstanding principal balance was $ 21.0 million at December 31, 2022. ​ The loan contains certain financial covenants, including minimum cash balance, leverage ratio, and interest coverage ratio requirements. At December 31, 2022, we were in compliance with the financial covenants related to the loan. ​ Current portion of long-term debt – The current portion of the Company’s outstanding debt was made up of $ 20.0 million under the Revolving Credit Facility, which was paid shortly after the balance sheet date, as well as $ 6.0 million of equipment loans, $ 40.0 million of related party debt associated with the Ramaco Coal acquisition, and $ 9.6 million of financing associated with the Maben Coal acquisition. ​ SBA Paycheck Protection Program Loan— On April 20, 2020, we received proceeds from the PPP Loan in the amount of $ 8.4 million from KeyBank, as lender, pursuant to the PPP of the CARES Act. The purpose of the PPP is to encourage the continued employment of workers. We used all of the PPP Loan proceeds for eligible payroll expenses, lease, interest and utility payments. We recognized $ 8.4 million of other income during 2020 for the anticipated full forgiveness of Paycheck Protection Program loan we received. On July 29, 2021, we were notified by KeyBank that full forgiveness had been approved by the SBA. There were no amounts outstanding as of December 31, 2022 and 2021. Insurance financing —In the fourth quarter of 2022, the Company financed premium payments of $ 5.6 million associated with various insurance policies, which must be repaid to a third-party finance company in monthly installments over a one-year term. The outstanding debt balance was $ 4.6 million at December 31, 2022, which is not reflected in the tables above or below. The total unamortized asset balance associated with upfront payments of insurance premiums to insurance carriers was $ 5.1 million at December 31, 2022, and was included in Prepaid expenses and other on the Consolidated Balance Sheet. Maturities of our debt, which include $ 1.7 million of discounts and issuance costs to be accreted over future periods, are as follows: ​ ​ ​ ​ ​ (In thousands) ​ ​ ​ Years ending December 31: ​ 2023 ​ $ 75,639 2024 ​ 18,406 2025 ​ ​ 351 2026 ​ ​ 34,500 2027 ​ ​ — Total debt ​ $ 128,896 ​ ​ ​ ​ ​ 95 Table of Contents NOTE 8—LEASES ​ The Company has various finance leases for mining equipment, which are generally for terms up to 36 months and expire through 2025. In addition, we have one operating lease for office space with a term of approximately five years that runs through 2027. ​ Amortization of right of use assets associated with finance leases was $ 4.8 million, $ 1.1 million, and $ 0.0 million in 2022, 2021, and 2020, respectively, as discussed in Note 3. Interest expense recognized for financing lease liabilities was $ 0.4 million, $ 0.1 million, and $ 0.0 million in 2022, 2021, and 2020, respectively. Operating lease expense was $ 0.2 million in 2022 and $ 0.1 million per year in 2021 and 2020. ​ Right-of-use assets and lease liabilities are determined as the present value of the lease payments, discounted using either the implicit interest rate in the lease or our estimated incremental borrowing rate based on similar terms, payments and the economic environment where the leased asset is located. Below is a summary of our leases: ​ ​ ​ ​ ​ ​ ​ ​ ​ (In thousands) Classification ​ December 31, 2022 ​ December 31, 2021 ​ ​ ​ ​ ​ ​ ​ ​ Right-of-use assets ​ ​ ​ ​ ​ ​ ​ Financing Financing lease right-of-use assets, net ​ $ 12,905 ​ $ 9,128 Operating Other assets ​ ​ 694 ​ ​ 25 Total right-of-use assets ​ ​ $ 13,599 ​ $ 9,153 ​ ​ ​ ​ ​ ​ ​ ​ Current lease liabilities ​ ​ ​ ​ ​ ​ ​ Financing Current portion of financing lease obligations ​ $ 5,969 ​ $ 3,461 Operating Accrued expenses ​ ​ 122 ​ ​ 25 Non-current lease liabilities ​ ​ ​ ​ ​ ​ ​ Financing Long-term portion of financing lease obligations ​ $ 4,917 ​ $ 4,599 Operating Other long-term liabilities ​ ​ 585 ​ ​ — Total lease liabilities ​ ​ $ 11,593 ​ $ 8,085 ​ Minimum lease payments for our lease obligations are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 (In thousands) Financing Operating Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Future minimum lease payments: ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ $ 6,302 ​ $ 161 ​ $ 6,463 2024 ​ ​ 4,005 ​ ​ 161 ​ ​ 4,166 2025 ​ ​ 1,032 ​ ​ 164 ​ ​ 1,196 2026 ​ ​ — ​ ​ 168 ​ ​ 168 2027 ​ ​ — ​ ​ 168 ​ ​ 168 Total undiscounted lease payments ​ ​ 11,339 ​ ​ 822 ​ ​ 12,161 Less: Amounts representing interest ​ ​ ( 453 ) ​ ​ ( 115 ) ​ ​ ( 568 ) Present value of lease obligations ​ $ 10,886 ​ $ 707 ​ $ 11,593 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average remaining term (years) ​ ​ 2.0 ​ ​ 5.0 ​ ​ ​ Weighted average discount rate ​ ​ 4.2 % ​ ​ 6.0 % ​ ​ ​ ​ Coal Leases and Associated Royalty Commitments —Leases of mineral reserves and related land leases are exempt from the lease accounting requirements addressed above. Refer to Note 10 for information regarding coal leases and associated royalty commitments. 96 Table of Contents ​ ​ NOTE 9—EQUITY We are authorized to issue up to a total of 260,000,000 shares of common stock and 50,000,000 shares of preferred stock, each having a par value of $ 0.01 per share. Holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders and to receive ratably in proportion to the shares of common stock held by them any dividends declared from time to time by the board of directors. Our common stock has no preferences or rights of conversion, exchange, pre-exemption or other subscription rights. The Company routinely allows employees to surrender common stock to pay estimated taxes upon the vesting or exercise of stock-based compensation awards. The value of common stock tendered by employees is determined based on the price of the Company’s common stock at the time of relinquishment. There were no other repurchases of common shares. Stock-Based Compensation Awards Our Long-Term Incentive Plan (“LTIP”) is currently authorized by shareholders for the issuance of awards of up to approximately 10.9 million shares of common stock. As of December 31, 2022, there were approximately 5.4 million shares of common stock available for grant under the LTIP, which includes 4.0 million authorized shares that became effective on February 23, 2022. Additionally, granted but unvested shares are forfeited upon termination of employment, unless an employee enters into another written arrangement, and may not be sold, assigned, transferred, pledged or otherwise encumbered. As of December 31, 2022, we had four types of stock-based awards outstanding: stock options, restricted stock, restricted stock units, and performance stock units. Stock-based compensation expense for all stock-based awards totaled $ 8.2 million in 2022, $ 5.3 million in 2021, and $ 4.1 million in 2020. Options— We granted options for the purchase of a total of 937,424 shares of our common stock for $ 5.34 per share to two executives on August 31, 2016. The options have a ten-year term from the grant date and are fully vested. During the third quarter of 2022, 20,000 options with an intrinsic value of $ 0.124 million were exercised, leaving a balance of 917,424 options. The remaining options are outstanding and unexercised and were in-the-money at December 31, 2022 with an intrinsic value of $ 3.2 million. No compensation expense was recognized for these awards in 2022, 2021, or 2020 as the awards became fully vested in previous years. ​ ​ 97 Table of Contents The following table summarizes the remaining stock-based awards outstanding, as well as activity for the periods: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Restricted Stock Restricted Stock Units Performance Stock Units ​ ​ ​ ​ Weighted ​ ​ ​ ​ Weighted ​ ​ ​ ​ Weighted ​ ​ ​ Average Grant ​ ​ ​ Average Grant ​ ​ ​ Average Grant ​ ​ Shares Date Fair Value ​ ​ Shares Date Fair Value ​ ​ Shares Date Fair Value Outstanding at December 31, 2020 2,845,525 ​ ​ 4.28 ​ — ​ ​ — ​ — ​ ​ — Granted 1,592,659 ​ 4.37 ​ — ​ — ​ — ​ — Vested ( 567,135 ) ​ 6.55 ​ — ​ — ​ — ​ — Forfeited ( 129,279 ) ​ 4.11 ​ — ​ — ​ — ​ — Outstanding at December 31, 2021 3,741,770 ​ $ 3.98 ​ — ​ $ — ​ — ​ $ — Granted 214,363 ​ 14.59 ​ 248,706 ​ 15.65 ​ 248,706 ​ 22.21 Vested ( 809,539 ) ​ 6.57 ​ ( 82,903 ) ​ 15.65 ​ — ​ — Forfeited ( 637 ) ​ 15.65 ​ — ​ — ​ — ​ — Outstanding at December 31, 2022 3,145,957 ​ $ 4.04 ​ 165,803 ​ $ 15.65 ​ 248,706 ​ $ 22.21 ​ The total fair value of awards vested was $ 11.0 million during 2022, $ 5.1 million during 2021, and $ 1.5 million during 2020. Restricted Stock — We grant shares of restricted stock to certain senior executives, key employees and directors. These shares vest over approximately one to three and a half years from the date of grant. During the vesting period, the participants have voting rights and may receive dividends. Upon vesting, the restricted stock becomes unrestricted common shares. The fair value of the restricted stock on the date of the grant during 2022, which averaged $ 14.59 per share, is amortized ratably over the service period. At December 31, 2022, there was $ 5.0 million of total unrecognized compensation cost related to unvested restricted stock to be recognized over a weighted-average period of 0.8 years. The fair value of restricted stock awards that vested during 2022 was $ 10.3 million. The fair value of the outstanding restricted stock awards was $ 27.7 million based on the year-end 2022 closing stock price. In December 2019, we entered into modification agreements with 14 executives and employees holding 1.4 million shares of unvested restricted stock whereby the vesting periods for these share grants was extended an additional six months . In exchange for the modification, we made an additional restricted stock grant to each of these executives and employees. In all, we granted 22,000 additional restricted shares in the modification. Incremental compensation costs associated with these modifications totaled $ 0.8 million and was recognized during 2020. Restricted Stock Units— We grant shares of restricted stock units to certain senior executives and key employees. These share units vest ratably over approximately three years from the date of grant. During the vesting period, the participants have no voting rights and no dividend rights; however, participants are entitled to receive dividend equivalents, which shall be subject to the same conditions applicable to the units and payable at the time the units vest. Upon vesting and within 30 days thereafter, the recipient will receive one share of common stock for each stock unit. The 248,706 restricted stock units granted during 2022 are linked to the Company’s common stock value which was fair valued on the date of grant at $ 15.65 per share and is recognized ratably over the service period. At December 31, 2022, there was $ 2.7 million of total unrecognized compensation cost related to unvested restricted stock units to be recognized over the next two years . The fair value of restricted stock unit awards that vested during 2022 was $ 0.7 million. The fair value of the outstanding restricted stock unit awards was $ 1.5 million based on the year-end 2022 closing stock price. Performance Stock Units— We grant shares of performance stock units to certain senior executives and key employees. These share units cliff-vest approximately three years from the date of grant based on the achievement of 98 Table of Contents targeted performance levels related to pre-established relative total shareholder return goals. These performance stock units have the potential to be earned from 0 % to 200 % of target depending on actual results. During the vesting period, the participants have no voting rights and no dividend rights; however, participants are entitled to receive dividend equivalents, which shall be subject to the same conditions applicable to the units and payable at the time the units vest. Upon vesting and within 30 days thereafter, the recipient will receive one share of common stock for each stock unit. The Company’s 248,706 performance stock units were valued relative to the stock price performance of a peer group of companies, which was fair valued at $ 22.21 per share at the date of grant based on a Monte Carlo simulation. The fair value of the performance stock units on the date of the grant is recognized ratably over the service period. At December 31, 2022, there was $ 3.8 million of total unrecognized compensation cost related to unvested performance stock units to be recognized over the next two years . The intrinsic value of the outstanding performance stock units, at target, was $ 2.2 million at December 31, 2022. Dividends ​ On February 18, 2022, the Company announced that its Board of Directors approved an increase in its initial quarterly cash dividend to $ 5.0 million from the formerly approved $ 2.5 million that was declared and accrued in December 2021. Dividends in the amount of $ 5.0 million, or approximately $ 0.11 per share of common stock, were paid on March 15, 2022, to shareholders of record on March 1, 2022. ​ Dividends in the amount of $ 5.0 million, or approximately $ 0.11 per share of common stock, were paid on June 15, 2022, to shareholders of record on June 1, 2022. ​ Dividends in the amount of $ 5.0 million, or approximately $ 0.11 per share of common stock, were paid on September 15, 2022, to shareholders of record on September 1, 2022. ​ Dividends in the amount of $ 5.0 million, or approximately $ 0.11 per share of common stock, were paid on December 15, 2022, to shareholders of record on December 1, 2022. ​ On December 8, 2022, the Company announced that its Board of Directors declared a quarterly cash dividend of approximately $ 0.1250 per share of common stock. Dividends of $ 5.5 million were accrued in December 2022, and are payable on March 15, 2023, to shareholders of record on March 1, 2023. ​ For the full year 2022, the Company recognized $ 23.1 million of cash dividends declared against retained earnings, including $ 5.5 million that were unpaid as of December 31, 2022. For the full year 2022, the Company paid $ 20.0 million of dividends, including $ 2.5 million that were accrued at December 31, 2021. ​ NOTE 10—COMMITMENTS AND CONTINGENCIES Environmental Liabilities — Environmental liabilities are recognized when the expenditures are considered probable and can be reasonably estimated. Measurement of liabilities is based on currently enacted laws and regulations, existing technology and undiscounted site-specific costs. Generally, such recognition would coincide with a commitment to a formal plan of action. No amounts have been recognized for environmental liabilities. Surety Bond — In accordance with state laws, we are required to post reclamation bonds to assure that reclamation work is completed. We also have a small amount of surety bonds that secure performance obligations. Bonds outstanding at December 31, 2022 totaled approximately $ 25.9 million. Coal Leases and Associated Royalty Commitments —We lease coal reserves under agreements that require royalties to be paid as the coal is mined and sold. Many of these agreements require minimum annual royalties to be paid regardless of the amount of coal mined and sold. Total royalty expense was $ 34.2 million, $ 18.5 million, and $ 11.8 million for the years ended December 31, 2022, 2021, and 2020, respectively. These agreements generally have terms running through exhaustion of all the mineable and merchantable coal covered by the respective lease. Royalties or throughput payments are based on a percentage of the gross selling price received for the coal we mine. Minimum 99 Table of Contents royalty obligations under coal leases total $ 27.1 million and are broken down as follows: $ 3.3 million for 2023, $ 3.3 million for 2024, $ 3.4 million for 2025, $ 3.1 million for 2026, $ 2.9 million for 2027, and $ 11.1 million thereafter. Please refer to Note 12 for information regarding related party transactions. Contingent Transportation Purchase Commitments —We secure the ability to transport coal through rail contracts and export terminals that are sometimes funded through take-or-pay arrangements. As of December 31, 2022, the Company’s remaining commitments under take-or-pay arrangements expiring through March 31, 2024 totaled $ 5.1 million, the majority of which are expected to be satisfied in one year. The level of these commitments will be reduced at a per ton rate as such rail and export terminal services are utilized against the required minimum tonnage amounts over the contract term stipulated in such rail and export terminal contracts. No amounts have been recognized as contingent liabilities related to take-or-pay arrangements. Litigation —From time to time, we are subject to various litigation and other claims in the normal course of business. No amounts have been accrued in the consolidated financial statements with respect to any matters. On November 5, 2018, one of our three raw coal storage silos that fed our Elk Creek plant experienced a partial structural failure. A temporary conveying system completed in late-November 2018 restored approximately 80% of our plant capacity. We completed a permanent belt workaround and restored the preparation plant to its full processing capacity in mid-2019. Our insurance carrier, Federal Insurance Company, disputed our claim for coverage based on certain exclusions to the applicable policy and, therefore, on August 21, 2019, we filed suit against Federal Insurance Company and Chubb INA Holdings, Inc. in Logan County Circuit Court in West Virginia seeking a declaratory judgment that the partial silo collapse was an insurable event and to require coverage under our policy. Defendants removed the case to the United States District Court for the Southern District of West Virginia, and upon removal, we substituted ACE American Insurance Company as a defendant in place of Chubb INA Holdings, Inc. The trial in the matter commenced on June 29, 2021, in Charleston, West Virginia. On July 15, 2021, the jury returned a verdict in our favor for $ 7.7 million in compensatory damages and on July 16, 2021, made an additional award of $ 25.0 million for inconvenience and aggravation. On August 12, 2021, the defendants filed a post-trial motion for judgment as a matter of law or in the alternative to alter or amend the judgment or for a new trial. The parties fully briefed the motion, and it stood submitted on August 31, 2021. On March 4, 2022, the court entered its memorandum opinion and order on the motion reducing the jury award to a total of $ 1.8 million, including pre-judgment interest, based largely on the court’s decision to vacate and set aside, in its entirety, the jury award of damages for inconvenience and aggravation. The same day, the court entered the judgment in accordance with the memorandum opinion and order. On April 1, 2022, we filed a notice of appeal with the U.S. Court of Appeals for the Fourth Circuit. The matter has been fully briefed by the parties, and the court heard oral argument on January 27, 2023. The matter is now pending before the court. NOTE 11—REVENUES Our revenue is derived from contracts for the sale of coal and is recognized when the performance obligations under the contracts are satisfied, which is at the point in time control is transferred to our customer. Generally, domestic sales contracts have terms of about one year and the pricing is typically fixed. Export sales have spot or term contracts, and pricing can be either a fixed price or a price derived against index-based pricing mechanisms. Sales completed with delivery to an export terminal are reported as export revenue. Disaggregated information about our revenue is presented below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In thousands) ​ ​ 2022 2021 2020 Coal Sales ​ ​ ​ ​ ​ North American revenue ​ ​ ​ $ 328,322 ​ $ 143,946 ​ $ 119,981 Export revenue, excluding Canada ​ ​ ​ 237,366 ​ 139,448 ​ 48,934 Total revenue ​ ​ ​ $ 565,688 ​ $ 283,394 ​ $ 168,915 ​ 100 Table of Contents Fourth quarter 2022 revenue that can be derived from the Company’s periodic filings includes a $ 2.8 million downward adjustment to revenue related to performance obligations that were satisfied in the previous quarter. This adjustment was due to the true-up of the Company’s previous estimate of certain provisional pricing provisions. As of December 31, 2022, the Company had outstanding performance obligations of approximately 1.5 million tons for contracts with fixed sales prices averaging $ 202 per ton, excluding freight, which will generally be satisfied within the next year, and 0.7 million tons for contracts with index-based pricing mechanisms . Index-based prices have not been estimated for the purpose of disclosing remaining performance obligations as permitted under the revenue recognition guidance when variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Sales into individual foreign countries equaling or exceeding 10 % of our total revenues included Canada and South Africa at 12 % and 10 %, respectively, for 2022. NOTE 12—RELATED PARTY TRANSACTIONS Mineral Lease and Surface Rights Agreements —Prior to the acquisition of Ramaco Coal, as discussed in Note 4, much of the coal reserves and surface rights that we controlled were acquired through a series of mineral leases and surface rights agreements with Ramaco Coal, who was a related party. Production royalties payable to Ramaco Coal in the amount of $ 0.4 million were included in accounts payable on the December 31, 2021 consolidated balance sheet. Royalties paid to Ramaco Coal in 2022, prior to the acquisition, totaled $ 3.1 million. Royalties paid to Ramaco Coal in 2021 and 2020 totaled $ 5.7 million and $ 4.5 million, respectively. Administrative Services —Also prior to the acquisition of Ramaco Coal, the Company and Ramaco Coal agreed to share the services of certain of each company’s employees pursuant to a Mutual Service Agreement, dated December 22, 2017, and effective as of March 31, 2017. Each party will pay the other a fee on a quarterly basis for such services calculated as the annual base salary of each employee providing services multiplied by the percentage of time each employee spent providing services for the other party. Year-to-date charges to Ramaco Coal in 2022, prior to the acquisition, were $ 44 thousand. Charges to Ramaco Coal were $ 0.1 million in 2021 and $ 0.2 million in 2020. Legal Services —Some of the professional legal services we receive are provided by Jones & Associates (“Jones”), a related party. Legal services paid to Jones in 2022 and 2021 totaled $ 0.8 million and zero , respectively. ​ Ramaco Coal Deferred Purchase Price— As part of the financing of the acquisition of Ramaco Coal, as discussed in Note 4, we incurred interest expense of $ 3.0 million in 2022. The outstanding principal balance of the Ramaco Coal Loan was $ 40.0 million at December 31, 2022. Refer to Note 7 for additional information regarding the terms of the financing. ​ Ramaco Foundation-- The Company made a charitable cash contribution of $ 1.0 million during 2022 to the Ramaco Foundation, which was recognized in other income (expense), net, on the income statement. The Ramaco Foundation is an unconsolidated not-for-profit organization whose board of directors includes several members of the Company’s management and board of directors. 101 Table of Contents NOTE 13—INCOME TAXES Income tax expense (benefit) consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (In thousands) 2022 2021 2020 Current taxes: ​ ​ ​ ​ ​ ​ ​ ​ ​ Federal ​ $ 517 ​ $ — ​ $ — State ​ 407 ​ 3 ​ 19 Current taxes ​ 924 ​ 3 ​ 19 Deferred taxes: ​ ​ ​ ​ ​ ​ ​ ​ ​ Federal ​ 28,389 ​ 6,518 ​ ( 3,164 ) State ​ 840 ​ ( 1,874 ) ​ ( 339 ) Deferred taxes ​ 29,229 ​ 4,644 ​ ( 3,503 ) Provision for income tax expense (benefit), net ​ $ 30,153 ​ $ 4,647 ​ $ ( 3,484 ) ​ The items accounting for differences between income taxes computed at the federal statutory rate and the provision recorded for income taxes were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (In thousands) 2022 2021 2020 Income taxes computed at the federal statutory rate ​ $ 30,701 ​ $ 9,325 ​ $ ( 1,762 ) Effect of: ​ ​ ​ ​ ​ ​ ​ ​ ​ State taxes, net of federal benefits ​ 1,422 ​ 796 ​ ( 253 ) State tax rate changes, net of federal benefits ​ ​ ( 546 ) ​ ​ ( 2,274 ) ​ ​ — Percentage depletion ​ ( 3,314 ) ​ ( 3,363 ) ​ ( 714 ) PPP Loan forgiveness ​ — ​ — ​ ( 1,773 ) Stock-based compensation ​ ( 1,499 ) ​ ( 194 ) ​ 473 162(m) compensation limitation ​ ​ 3,481 ​ ​ — ​ ​ — Other, net ​ ( 92 ) ​ 357 ​ 545 Total ​ $ 30,153 ​ $ 4,647 ​ $ ( 3,484 ) ​ Deferred tax assets and liabilities were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (In thousands) 2022 2021 Deferred tax assets: ​ ​ Loss carryforwards U.S. - Federal/States ​ $ 6,598 ​ $ 15,975 Asset retirement obligations ​ 6,359 ​ 5,175 Accrued expenses ​ 3,257 ​ 744 Stock-based compensation ​ 2,249 ​ 2,331 Total deferred tax assets ​ 18,463 ​ 24,225 ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities: ​ ​ ​ ​ ​ ​ Depreciation & amortization ​ ( 54,100 ) ​ ( 30,631 ) Net deferred tax liabilities ​ $ ( 35,637 ) ​ $ ( 6,406 ) ​ As of December 31, 2022, our federal net operating loss carryforwards were approximately $ 24 million. Total state loss carryforwards were approximately $ 32 million. The Company’s net operating loss carryforwards have no statutory expiration. Cash paid for income taxes totaled $ 15.5 million in 2022. The Company recognized an income tax receivable of $ 14.6 million included in prepaid expenses and other current assets at December 31, 2022. 102 Table of Contents NOTE 14—EARNINGS (LOSS) PER SHARE The following table is a calculation of the net earnings (loss) per basic and diluted share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (In thousands, except per share amounts) ​ 2022 2021 2020 Numerator ​ ​ ​ ​ Net income (loss) ​ $ 116,042 ​ $ 39,759 ​ $ ( 4,907 ) Denominator ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares used to compute basic earnings per share ​ 44,164 ​ ​ 43,964 ​ ​ 42,460 Dilutive effect of stock option awards ​ 532 ​ ​ 293 ​ ​ — Dilutive effect of restricted stock units ​ ​ 6 ​ ​ ​ ​ ​ ​ Weighted average shares used to compute diluted earnings per share ​ 44,702 ​ 44,257 ​ 42,460 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings (loss) per share ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 2.63 ​ $ 0.90 ​ $ ( 0.12 ) Diluted ​ $ 2.60 ​ $ 0.90 ​ $ ( 0.12 ) ​ Diluted EPS for 2022 excludes 248,706 of target performance stock units based on the guidance for contingently issuable shares, which requires exclusion when, based on current period results, the shares would not be issuable if the end of the reporting period were the end of the contingency period. Refer to Note 9 for additional information regarding performance stock unit awards. Diluted EPS for 2020 excludes 937,424 options to purchase our common stock because their effect would be anti-dilutive. NOTE 15—SUBSEQUENT EVENTS Shortly after the balance sheet date, the Company repaid $ 20 million of the $ 25 million of borrowings under the Revolving Credit Facility using funds from current operations. At a later date, on February 15, 2023, the Company entered into the Second Amended and Restated Credit and Security Agreement, which includes multiple lending parties and provides additional borrowing capacity compared to the facility utilized in 2022. The new facility, which has a maturity date of February 15, 2026, provides an initial aggregate revolving commitment of $ 125.0 million as well as an accordion feature of $ 50 million subject to certain terms and conditions, including lender’s consent. The aggregate revolving commitment had a borrowing base of $ 66.3 million at the closing date of the new facility after consideration of collateral and reserve requirements. The Company utilized the new facility to borrow an additional $ 20 million and used $ 10 million of the proceeds to pay down related-party debt associated with the acquisition of Ramaco Coal. The remaining availability under the new facility was $ 41.3 million at the closing date after outstanding borrowings of $ 25.0 million. Revolving loans under the new facility bear interest at either the base rate plus 1.50 % or the Secured Overnight Financing Rate plus 2.00 %. The base rate equals the highest of the administrative agent’s prime rate, the Federal Funds Effective Rate plus 0.5 %, or 3 %. The terms of the new facility include covenants limiting the ability of the Company to incur additional indebtedness, make investments or loans, incur liens, consummate mergers and similar fundamental changes, make restricted payments, and enter into transactions with affiliates. The terms of the new facility also contain a financial covenant that requires the Company to maintain a fixed charge coverage ratio of not less than 1.10 :1.00 calculated as of the last day of each fiscal quarter starting with the first quarter of 2023. The new facility also contains certain compensating balance requirements, which include that the Company maintain an average daily cash balance of $ 5 million, as determined on a monthly basis, to assure future credit availability. * * * * * 103 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.